Are You an Entrepreneur Looking to Lower Tax burdens in China?

If you're running a small business in China—or thinking of starting one—you may be leaving serious money on the table. The Chinese government has just extended and enhanced a series of generous tax relief policies aimed squarely at supporting small and micro enterprises. These incentives could dramatically cut your tax bill, reduce compliance burdens, and free up capital for growth.

Here's what you need to know—and how to take full advantage.

💼 2. China’s Corporate Income Tax (CIT) Deep Discount for “small-micro profit enterprise” (SMPE)

Tick all four boxes and you’re qualified.

1. Not in a restricted industry

2. ≤ 300 employees

3. Total assets < RMB 50 million

4. Annual taxable income < RMB 3 million

Then, you’ll benefit from this two-tiered tax break:

1. First RMB 1 million of annual taxable profit
   • Only 12.5 % of that amount is counted as the tax base.
   • Taxed at the standard CIT rate of 20 %.
   Effective rate = 2.5 %.

2. Next RMB 1–3 million (i.e., the slice between 1 M and 3 M)
   • 50 % of that slice is counted as the tax base.
   • Again taxed at 20 %.
   Effective rate on this band = 10 %.

Put together, if your annual taxable profit is exactly RMB 3 million, your total CIT bill is only:

• RMB 1 M × 2.5 % = RMB 25 k

• (RMB 2 M × 10 %) = RMB 200 k
  = RMB 225 k total instead of the normal 25 % (RMB 750 k).

That’s a 70 % tax cut, freeing up RMB 525 k for reinvestment—available through at least 2027. This is real, scalable savings designed to support small business growth.

♿ 3. Employment Security Relief Program: Waivers and Reductions

This initiative is focused on small businesses with fewer than 30 employees, acknowledging their critical role in job creation. 

According to the Ministry of Finance:

• Companies with 30 or fewer employees are temporarily exempt from the employment security contributions for persons with disabilities—no matter their revenue or assets.

• For companies with more than 30 employees:

  If your workforce includes at least 1% employees with disabilities (but less than the local quota), you pay only 50% of the required contribution.

  If you fall below 1%, you still get a 10% reduction.
  

Ensuring job security not only helps maintain morale but also stabilizes operations, allowing you to navigate through tough periods without having to lay off valued staff.

⚙️ Why This Matters

These aren’t footnotes in a policy paper—they’re strategic fuel. Used correctly, they let you operate leaner, move faster, and out-muscle bigger competitors.

🤝 Let Gomax International Run the Numbers

At Gomax International, we help foreign and domestic businesses cut through China’s regulatory complexity and unlock every advantage. Our services include:

• ✅ Company registration & legal setup • ✅ Corporate income tax & VAT optimization • ✅ HR and labor compliance • ✅ Trademark and IP registration • ✅ Full-service accounting & advisory We monitor every policy shift—so you stay compliant and ahead of the curve.

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📩 Ready to turn savings into scale?
Website: gomaxgroup.com
Email: info@gomaxgroup.com

Gomax International is your trusted partner for long-term business success in China. Let's take your small business to the next level—with less tax and more confidence.